So I have some more nostalgia prone friends who nearly teared up at the news that the United States Postal Service is ending letter delivery on Saturdays, though they will retain package delivery for now to comply with Congressional legislation. It's time when USPS is much maligned and may suggest it should be given the ax or entirely privatized In the wake of the Saturday delivery news, Joshua Keating writes up a 2011 study by Oxford Strategic Consulting that ranks the best post services among the G-20 countries. Guess who was number one? USA! USA! USA!
Rounding out the top six are Japan, Korea, Australia, Canada, and Germany. Notably, Germany is the only one of the six that is entirely privatized. There are a lot of ideas to extend upon postal services that the US should maybe consider. Japan and Korea have a postal service that also offers simple bank products like savings accounts. Australia, dealing with rural delivery issues, actually sells "franchises" in rural areas for a town's general store to manage postal delivery. Meanwhile, Canada allows people to handle electronic transactions through Canada Post.
Personally, I think the Australia model could be a great way for the US to go. In those more rural areas, sell franchising rights to the general stores and commissaries that keep the more wide open portions of this country stocked with supplies. Maybe include an opt-in delivery option, where you need to request home delivery. If you aren't worried about home delivery, you could always pick up your mail when you go into town. Apparently the GAO wants the USPS to do the bill pay stuff Canada Post does. I haven't looked into it deeply, but I'm not sure how much that would help the USPS.
Anyway postal carriers, hold you heads a little higher. You're the best in the world. Oh, and enjoy your weekends.
I wonder how the study accounts for the fact that USPS lost something like $16 billion last year while Deutsche Post made over $1 billion in 2011 in its methodology. I've looked for a copy of the report online but have come up with nothing.
ReplyDeleteIn any case the solution to the travails of the USPS is pretty straightforward: privatize it and end its monopoly. Let the market figure it out. If someone is willing to pay money to have something delivered, the market will provide. The market can handle the delivery of overnight mail, packages, flowers, edible arrangements and pizza, so why not letters?
Of the $15.9 billion loss, $11 billion resulted from the ridiculous and highly unusual pre-funding pension requirement imposed on the USPS--the same requirement that has forced a loss on USPS in otherwise profitable years over the last decade or so. Cite. Worth noting, as well, is the increase in productivity of postal workers and, of course, the fact that the USPS is the best in the G-20.
ReplyDeleteFinally, it is, once again, worth pointing out that the market's successful delivery of packages, flowers, etc. is the result of the market free-riding on the USPS's knowlege and expertise. Perhaps these bodies ought to pay the USPS a royalty everytime they deliver a package or bouquet of flowers. Then the taxpayers would have both the best postal service in the world and a profitable one.
Privatization is one potential solution. It is not the only solution.
From the AP: Considering its operations alone, the agency actually made $100 million delivering the mail — earning $17.7 billion in revenue against $17.6 billion in operating expenses. But the health care funding and some other expenses pushed it to a net loss.
ReplyDelete$11 billion resulted from the ridiculous and highly unusual pre-funding pension requirement imposed on the USPS
ReplyDeleteHey, that's another great argument for privatization -- it would be free of government mandates such as the pension funding.
the fact that the USPS is the best in the G-20.
Fact?
the agency actually made $100 million delivering the mail
A monopolist managing to eke out a profit? Who'd have thunk it.
the market's successful delivery of packages, flowers, etc. is the result of the market free-riding on the USPS's knowlege and expertise
Yet another argument in favor of privatization -- eliminate the de facto subsidies and let them all compete on an even playing field!